SAO PAULO (Reuters) -Brazil's finance minister said on Monday his country would not give up negotiating with the U.S. but acknowledged that a trade deal may fail to be reached by August 1, when President Donald Trump's 50% tariffs on Brazilian goods are due to take effect.
"That could happen," Fernando Haddad told radio station CBN in an interview, saying Latin America's largest economy was still awaiting a response from Washington on trade proposals initially submitted in May.
Trump announced the
steep tariffs earlier this month, citing what he called a "witch hunt" against former Brazilian president Jair Bolsonaro, who is on trial on charges of plotting a coup, and trade practices he said were unfair.
Haddad said Brazil had contingency plans to deal with any potential tariffs, and could ultimately redirect more than half its current U.S. exports to other markets.
"But that would take time," he cautioned.
The U.S. is a large buyer of Brazil's oil, steel products, coffee, aircraft and orange juice, but runs a trade surplus with the South American country - a point Brazilian officials have used to label the threatened tariffs as unjustified.
Companies such as planemaker Embraer, which has the U.S. as its main market, would be hard hit by Trump's move.
Haddad said the Brazilian government may need to support the sectors most affected by tariffs, but stressed that such measures would not necessarily incur larger primary spending.
President Luiz Inacio Lula da Silva has pledged to reciprocate like-for-like if tariffs take effect as promised, but Haddad on Monday said Brazil would not seek to punish U.S. companies operating in the country.
"We cannot pay back in kind something that we consider unfair," the minister said.
(Reporting by Gabriel Araujo and Bernardo Caram; Editing by Sharon Singleton, Bernadette Baum and Dale Hudson)
